“New Energy Vehicles”: Can China Break Big Oil’s Global Order?

In the antebellum south of the United States, the planation owning slaveholders kept their power because of an economic order summed up by the slogan “Cotton is King.” In today’s international order, a small clique of western monopolists hold on to power because “Oil is King.” However, China’s new regulations pushing electric cars show an emerging challenge to this global setup.

Top Car Market Going Electric

The western business press are in shock now that China has announced its new regulations for the automobile industry. In 2019, every automaker that either imports or produces more than 30,000 cars in China, must make sure that 1 out of every 10 is an electric car. The quota will increase to 12% in 2020, and that year the state will begin imposing penalties on companies that do not comply.

The announcements shook the world, as China is the largest car market on the planet, selling well over 28 million cars in 2016. Now, state intervention in the economy will force the number of what Chinese officials have called “New Energy Vehicles” to vastly increase, as gasoline powered cars are reduced. While British and American politicians talk endlessly about “climate change” and “fossil fuels” they would never dream of taking such swift action.

The new rules won’t come into effect until 2019, but Electric cars have already been growing in China. The state has been chartering corporations to produce them and heavily investing in the research and development to make them more efficient, as part of its Five Year Plan. The China Association of Automobile Manufacturers reports that in the month of August, approximately 68,000 electric cars were sold across the Chinese mainland. Already in 2017, 320,000 were sold, with the number expected to reach over 700,000 by the end of the year.

As a result of a conscious effort by Communist Party leaders to fund research and development, the efficiency of China’s electric cars is also increasing. In 2016, China’s electric cars required a charge every 101 miles (164 kilometers) on average. In 2017, the average New Energy Vehicle in China can travel 156 miles (252 kilometers) before needing to recharge.

In western media, as the business press centered around Wall Street complains, and liberal environmentalists rejoice while throwing in passing digs at China on other issues, the real question is not being asked. What motivates China to take such drastic measures to reduce the role of petroleum?

An Empire of Poverty & Tyranny

If you ask who has the power in the international financial system, the question can be answered with two words: Oil Bankers. The four super-major oil companies, Chevron, BP, Royal Dutch Shell, and Exxon-Mobil are largely considered to be the greatest blocs of power in the western world.

JP Morgan Chase, the combined financial empire of the Morgans and the Rockefellers controls Exxon-Mobil, the most powerful oil corporation in the western world. British Petroleum, the oil giant directed by forces in both Wall Street and the London Stock Exchange, is deeply tied to the titanic financial entity called HSBC Bank.

The House of Saud, with their barbaric Wahabbist political system, were selected and propped up by the British oil elite in the 1800s. The Saudi royal family has ruled the Arabian Peninsula as vassals ever since. In 1945, American oil tycoons followed their British cohorts and embraced the Kingdom of Saudi Arabia.

Throughout the Middle East, various autocratic monarchies in places like Qatar, Kuwait, United Arab Emirates, Bahrain, and elsewhere sit as outposts of western financial power. These regimes make no regard for human rights while torturing, beheading, flogging, and using terror to suppress those who might challenge them. These primitive regimes of the Arab world preside over underdeveloped societies with thousands of guest workers who live as 21st century slaves. The western super-majors happily extract their oil, and sell them weapons. Its no secret that many of these regimes are tied to terrorist groups in Syria, Libya, and elsewhere.

But the empire of the oil cartel expands beyond the Middle East. Africa’s top oil exporting country is Nigeria, a country where the average life expectancy is a mere 53 years old, and the rate of literacy is below 60%. BP, Shell, Exxon-Mobil, and Chevon extract petroleum from the Niger Delta region, enriching themselves as the people of this African nation face recurring crises of malnutrition. According to the CIA World Factbook, over 19% of Nigerian children under 5 are underweight.

Meanwhile, most of the targets of US and NATO foreign policy have been oil producing countries that don’t obey, compliantly remaining under-developed as their resources are extracted. Iraq was a major oil exporter led by a Baath Socialist government before it was blown to bits by US invasion in 2003. Libya, where the state controlled oil resources laid the basis for development and the highest life expectancy on the African continent, was ripped apart by NATO bombs.

Prior to 2011 when the civil war began, and the NATO states funded anti-government terrorists, Syria was in the process of building an oil pipeline to connect its neighbor, the Islamic Republic of Iran, to the Mediterranean. Iran, the target of US sanctions and threats, is another independent oil exporting country, where a state controlled oil apparatus competes with western corporations.

Venezuela is also a major oil exporter, and competitor with western petroleum monopolists. Not surprisingly, its socialist government, that sells oil on the global market, is a target of economic sabotage and threats of military intervention.

Angola, a major oil exporting country in southern Africa, has barely had a moment of peace since it became independent in 1975. The MPLA government has faced an onslaught of terrorism and violence, often from forces backed by the United States, keeping it impoverished and at the mercy of western oil extractors. Only in 2002 was peace finally established, allowing Angola to slowly begin to develop with China’s assistance.

Petroleum Holds Back History

The Islamic Republic of Iran has an economy centered around publicly controlled oil resources, but that hasn’t stopped it from pioneering alternative energy. In fact, the Iranian government is also one of the biggest supporters of fusion energy research. Despite the hostility between the two countries, Iranians scientists have even collaborated with American scientists in pursuit of fusion power.

Why would Iran be funding research into alternative energy sources that would eliminate their major export? The reason is that being heavily dependent on oil is understood to be a weakness for Iran. An economy centered around one commodity is vulnerable to price drops. Sanctions that limit Iran’s ability to export also have the ability to harm them. Iran has developed its own cars, steel mills, and other manufacturing. China has worked closely with Iran to develop other aspects of its economy, making it less vulnerable to the turbulence of the oil market.

Venezuela’s current political crisis is largely a result of the drop in oil prices that began in 2014. The social programs created by the United Socialist Party, which made Hugo Chavez and his successor Nicolas Maduro wildly popular, were funded by oil revenue. The dropping of the oil prices was key in fomenting the current economic woes and the resulting political unrest.

Though China is an oil importing country, not selling on the global market, it also faces vulnerability from the globalist oil order. China’s vast apparatus of production is dependent on oil imports. China produces half of the steel in the world, along with a large percentage of the world’s copper, aluminum, and other key commodities. China sells cars across the planet. China also has the largest telecommunications manufacturer on earth, Huwai.

However, the second largest economy in the world could be brought to a grinding halt, if at any point the oil supply was cut off. 57% of the oil necessary to run China’s booming industries, is imported from outside the country.

The reason that the South China Sea has been a space of military tension between China and the USA is because the overwhelming majority of China’s oil imports reach the country via its ports in Shanghai, Guangzhou, and Hong Kong. Securing the South China Sea is essential for China, and the US military presence hold the dangerous potential for a blockade.

For countries that seek independence and development, whether they are oil importers or exporters, the fact that the world economy is largely centered around oil presents a big problem.

It is in China’s interest, as well as the interest of many countries, for the human race to move beyond the current stage of an oil based global economy. This can only be achieved with technological breakthroughs, advancing to higher forms of energy.

“Oil is King,” but how much longer?

In the southern states of the USA prior to the 1861 Civil War, those who understood its economy often said “Cotton is King.” Louisiana, Mississippi, Georgia and Alabama had economies that were entirely based on the production of cotton, which was sold to Britain and other places where the textile industry was emerging.

Even though the world community recognized that slavery was an abominable, genocidal violation of human rights, and the emergence of industrial production made slavery inefficient, the slave masters would not willingly give it up. The entire basis of their power depended on the plantation economy centered around “King Cotton.”

However, the wheels of history moved into motion. The slave plantation owners were defeated. The practice of owning human beings was completely eliminated in the United States, as a higher mode of production violently asserted itself in what Marxists call “The Second American Revolution.”

A similar clash exists in the world today. Technology is advancing. The power of the small clique of western financial oligarchs depends on oil remaining central. The primacy of petroleum makes independent countries vulnerable to an international market that is largely dominated by a small clique of western bankers.

As China and other countries with state-controlled, centrally planned economies emerge and develop on the world stage, the oil order is fighting to preserve itself. China’s huge investments in new technology like Artificial Intelligence, along with its state-driven push away from petroleum based production, is posing a serious challenge to forces of entrenched global power.

Caleb Maupin is a political analyst and activist based in New York. He studied political science at Baldwin-Wallace College and was inspired and involved in the Occupy Wall Street movement, especially for the online magazine “New Eastern Outlook”.

Electronic analytical journal New Eastern Outlook 2010-2018Republishing of the articles is welcomed with reference to NEO.The views of the authors do not necessarily coincide with the opinion of the editorial board.